How Does Losing Your Job Later in Life Affect Retirement?

Losing your job late in your career can be life altering. It’s more difficult to re-enter the workforce for someone over 50 and, more importantly, your income stream is interrupted during peak earning years. This can have a significant effect on your ability to save for retirement—especially if you were hoping to do a lot of savings “catching up” in your last few years of employment.

You probably know someone this has happened to. In fact, a recent study by the Transamerica Center for Retirement Studies found that a majority of people (58%) are not able to work as long as they would like.¹ On average, people retire around age 62, several years short of the traditional age of 65.

The study found that being laid off was a significant reason for no longer being able to work (43%). But it wasn't the top issue. Health-related reasons at 46% were cited as the number one factor in being forced into early retirement. Family issues were a distant third.

Even more sobering than the news that so many people are unable to keep working is the financial state of these early retirees. Only about one in five (21%) reported being financially stable. Careful planning for retirement can help you acknowledge and strategize for risks such as having to leave work before you want to.

First, you can take seriously any ongoing health issues that might one day prevent you from working. Second, you can become more intentional about your career. Instead of sitting back and hoping for the best, you can actively pursue the plans and connections required to transition to another role, if necessary.

Finally, talk with our Participant Success Center . They can help you explore alternative paths to take should your career end before you are ready.

The future is stubbornly unknowable. However, you can take steps to help make sure your retirement plan can weather unforeseen events by including flexibility, as well as cultivating your own attitude of resilience. Your retirement may not turn out exactly as you've imagined it. But whatever happens, you can plan to face it with peace of mind.

 

1. http://go.pardot.com/e/91522/reers-cut-short-194938202-html/96k8ln/2753160229/h/tdQj3F8CrWefMZLQDfF_i9JkcT9viVSfnUaS8xSatJ8